Shri Amrutlal Laxmidas Ardeshna, Ahmedabad V. The ACIT.,Circle-7, Ahmedabad

ITA 1949/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1682 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 22-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 31-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOMUGYAN PAL
• Assessee Lawyers: M K PATEL
• Keywords: Assessment record

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1949/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) AMRUTLAL LAXMIDAS ARDESHNA 906, KALASAGAR-II B/H. PRERNATIRTH DERASAR SATELLITE, AHMEDABAD-380 015 / VS. THE ACIT CIRCLE-7 AHMEDABAD ./ ./ PAN/GIR NO. : ACTPA 6087 A ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MR. M.K. PATEL.,AR / RESPONDENT BY : SMT. SOMUGYAN PAL, SR.DR / DATE OF HEARING 22/04/2016 !'# / DATE OF PRONOUNCEMENT 12/05/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XIV, AHMEDABAD DATED 27/06/2012 PASSED FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS FOR AY 2008-09 AS CULLED OUT FROM THE MATERIALS ON RECORD ARE AS UNDER:- ITA NO. 1949/AH D/2012 AMRUTLAL LAXMIDAS ARDESHNA VS. ACIT ASST.YEAR 2008-09 - 2 - 2.1. ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM B USINESS AND PROFESSION, HOUSE PROPERTY AND LONG TERM CAPITAL GA IN (LTCG). THE ASSESSEE FILED HIS RETURN OF INCOME FOR AY 2008-09 ON 30/09/2008 DECLARING TOTAL INCOME AT RS.16,56,950/-. THEREAFT ER, THE ASSESSING OFFICER (AO) HAS FRAMED ASSESSMENT U/S.143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 20/12 /2010 DETERMINING TOTAL INCOME AT RS.22,94,830/-. AGGRIEVED BY THE O RDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LDCIT(A), WH O VIDE ORDER DATED 27/06/2012 IN APPEAL NO.CIT(A)XIV/AC.CIR.7/299/2010 -11, GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED ORDER OF THE LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US BY RAISING FOLLOWING GRO UNDS:- (1) THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN CONFIRMING THE ADDITION OF RS.3,99,195/- O UT OF MINE AND TRANSPORTATION EXPENSES. (2) THAT ON FACTS AND IN LAW, IT OUGHT TO HAVE BEEN HEL D THAT THE AR OF THE ASSESSEE HAD NOT AGREED FOR SUCH ADDITION, S INCE ENTIRE EXPENSE AS SUPPORTED BY BILLS/VOUCHERS AND ARE FULL Y VERIFIABLE. (3) THAT ON FACTS AND IN LAW, THE EARNED CIT(A) HAS GRI EVOUSLY ERRED IN CONFIRMING DISALLOWANCE AT 10% OUT OF PETR OL, TELEPHONE & CONVEYANCE EXPENSES. 2.2.. GROUND NOS.1 & 2 ARE INTER-CONNECTED AND, THE REFORE, CONSIDERED TOGETHER. ITA NO. 1949/AH D/2012 AMRUTLAL LAXMIDAS ARDESHNA VS. ACIT ASST.YEAR 2008-09 - 3 - 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AO NOTICED THAT THE ASSESSEE HAD DEBITED MINE EXPENSES OF RS.24,96, 224/- AND TRANSPORTATION EXPENSES OF RS.54,87,665/-. AO NOTI CED THAT SINCE IT WAS NOT POSSIBLE TO VERIFY THE GENUINENESS OF ALL VOUCH ERS, HE MADE AN ADHOC DISALLOWANCE OF 5% AND THUS MADE DISALLOWANCE OF A SUM OF RS.3,99,195/-. AGGRIEVED BY THE ORDER OF THE AO, A SSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO UPHELD THE ORDER O F AO BY OBSERVING AS UNDER:- 2.3. DECISION: I HAVE CAREFULLY PERUSED THE FINDINGS OF THE ASSESS ING OFFICER AND SUBMISSIONS MADE BY THE LD.AR. IT IS NOTED FROM THE ASSESSMENT ORDER THAT THE APPELLANT HAD AGREED FOR THE DISALLOWANCE. TO VERIFY THE FIN DINGS GIVEN IN THE ASSESSMENT ORDER, THE ASSESSMENT RECORDS WERE OBTAI NED FROM THE ASSESSING OFFICER. IT IS NOTED THAT DURING THE COURSE OF HEA RING ON 13/12/2010, THE APPELLANT WAS SPECIFICALLY ASKED FOR THE DISALLOWAN CE @ 5% TO WHICH NO OBJECTION WAS RAISED AND THE A.R. OF THE APPELLANT PRESENT AT THAT TIME HAD SIGNED IN THE ORDER SHEET. ACCORDINGLY, IN VIEW OF THESE FACTS, ONCE THE APPELLANT HAS AGREED ON THE DISALLOWANCE, THERE IS NO JUSTIFICATION IN MAKING THE APPEAL AGAINST THE DISALLOWANCE. THE DISALLOWA NCE MADE BY THE A.O. IS ACCORDINGLY UPHELD AND THE GROUND OF APPEAL IS DISM ISSED. 3 .1. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US, LD.AR REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD.CIT(A) AND FURTHER SUBMITTED THAT THE EXPENS ES INCURRED WERE INCIDENTAL TO THE BUSINESS ACTIVITY, THE PAYMENTS W ERE MADE BY A/C.PAYEE CHEQUES AND WHEREVER APPLICABLE ASSESSE E HAD DEDUCTED ITA NO. 1949/AH D/2012 AMRUTLAL LAXMIDAS ARDESHNA VS. ACIT ASST.YEAR 2008-09 - 4 - TDS BEFORE MAKING PAYMENT. HE FURTHER SUBMITTED TH AT THE AR OF THE ASSESSEE HAD NEVER AGREED FOR AN ADHOC DISALLOWANC E AND THAT NO AD-HOC DISALLOWANCE CAN BE MADE WITHOUT POINTING OUT AS TO WHICH OF THE EXPENSES IS NOT THE PURPOSE OF BUSINESS. HE, THERE FORE, SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO BE DELETED. ON THE OTHE R HAND, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS ABOUT DISALLOWANCE OF EXPENSES OF ADHOC BASIS. WE FIND THAT THE AO WITHOUT POINTING OUT, AS TO WHICH OF THE EXPENSES ARE NOT GENUINE, HAD PROCEEDED TO DISALLOW THE EXPENSES. BEFORE US, IT IS ASSESSEES SUBMISSION THAT THE EXP ENSES ARE INCURRED FOR THE PURPOSE OF BUSINESS AND THE PAYMENTS WERE MADE THROUGH A/C.PAYEE CHEQUES, AFTER DEDUCTING THE TDS WHEREVER APPLICAB LE AND THAT THE ASSESSEE HAD NEVER AGREED FOR AN ADHOC DISALLOWANCE . BEFORE US, LD.SR.DR HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE . IN VIEW OF THE AFORESAID FACTS OF THE CIRCUMSTANCES OF THE CASE, W E ARE OF THE VIEW THAT NO DISALLOWANCE CAN BE MADE ON ADHOC BASIS WITHOUT POINTING OUT ANY INSTANCE OF NON-GENUINENESS OF THE EXPENSES. THUS, GROUND NOS.1 & 2 OF ASSESSEES APPEAL ARE ALLOWED. ITA NO. 1949/AH D/2012 AMRUTLAL LAXMIDAS ARDESHNA VS. ACIT ASST.YEAR 2008-09 - 5 - 6. GROUND NO.3 IS WITH RESPECT TO DISALLOWANCE OF 1 0% OUT OF PETROL, TELEPHONE, CONVEYANCE EXPENSES, ETC. 6.1. AO WHILE PERUSING THE PROFIT & LOSS ACCOUNT, N OTICED THAT THE ASSESSEE HAD DEBITED PETROL, TELEPHONE AND CONVEYAN CE EXPENSES OF RS.69,984/-, RS.38,904/- AND RS.44,540/- RESPECTIVE LY AGGREGATING TO RS.1,53,428/-. THE AO WAS OF THE VIEW THAT THE PER SONAL USE OF ELEMENT IN THE ABOVE EXPENSES CANNOT BE RULED OUT, HENCE HE DISALLOWED @ 20% OF THE TOTAL EXPENSES, I.E. AMOUNTING TO RS.30,686/ -. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO RESTRICTED THE DISALLOWANCE TO 10%, BY OBSERVING AS UNDER:- 3.3. DECISION : I HAVE CAREFULLY PERUSED THE FINDINGS OF THE ASSESSING OFF ICER AND SUBMISSIONS MADE BY THE LD.AR. THE A.O. HAS MADE THE DISALLOWA NCE BY CONSIDERING THE ELEMENT OF PERSONAL USE IN THE ABOVE EXPENSES. THE APPELLANT HAS SUBMITTED THAT DISALLOWANCE IS WITHOUT ANY BASIS AND THERE WA S NOT PERSONAL ELEMENT IN THE EXPENSES. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES, IT WOULD MEET THE ENDS OF JUSTICE, IF THE DISALLOWANCE IS RESTRIC TED TO 10% OF THE EXPENSES OF PETROL, TELEPHONE AND CONVEYANCE ON ACCOUNT OF PERS ONAL USE. THE GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED. 6.2. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), ASSES SEE IS NOW IN APPEAL BEFORE US. BEFORE US, LD.AR REITERATED THE SUBMISS IONS AS WERE MADE BEFORE THE AO AND LD.CIT(A). ON THE OTHER HAND, LD.SR.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD.CIT(A) ITA NO. 1949/AH D/2012 AMRUTLAL LAXMIDAS ARDESHNA VS. ACIT ASST.YEAR 2008-09 - 6 - RESTRICTED THE DISALLOWANCE TO 10% AS AGAINST 20% M ADE BY THE AO. BEFORE US, LD.AR HAS NOT PLACED ANY COGENT MATERIAL TO ESTABLISH THAT THE EXPENSES THAT WERE INCURRED DID NOT HAVE ANY PERSON AL ELEMENT. WE FURTHER HELD THAT AFTER CONSIDERING THE FACTS, LD.C IT(A) RESTRICTED THE ADDITION TO 10% INSTEAD OF 20% AS MADE BY THE AO. CONSIDERING THE TOTALITY OF FACTS, WE FIND NO REASON TO INTERFERE W ITH THE ORDER OF THE LD.CIT(A). THUS, GROUND NO.3 OF ASSESSEES APPEAL IS DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/05/2016 SD/- SD/- ( S.S. GODARA ) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 12/ 05 /2016 &.., .(../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-XIV, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, //TRUE / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD